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BukuWarung, a fintech for Indonesian MSMEs, scores $60M Series A led by Valar and Goodwater
BukuWarung, a fintech focused on Indonesia’s micro, small and medium enterprises (MSMEs), announced today it has raised a $60 million Series A. The oversubscribed round was led by Valar Ventures, marking the firm’s first investment in Indonesia, and Goodwater Capital. The Jakarta-based startup claims this is the largest Series A round ever raised by a startup focused on services for MSMEs. BukuWarung did not disclose its valuation, but sources tell TechCrunch it is estimated to be between $225 million to $250 million.
Other participants included returning backers and angel investors like Aldi Haryopratomo, former chief executive officer of payment gateway GoPay, Klarna co-founder Victor Jacobsson and partners from SoftBank and Trihill Capital.
Founded in 2019, BukuWarung’s target market is the more than 60 million MSMEs in Indonesia, according to data from the Ministry of Cooperatives and SMEs. These businesses contribute about 61% of the country’s gross domestic product and employ 97% of its workforce.
BukuWarung’s services, including digital payments, inventory management, bulk transactions and a Shopify-like e-commerce platform called Tokoko, are designed to digitize merchants that previously did most of their business offline (many of its clients started taking online orders during the COVID-19 pandemic). It is building what it describes as an “operating system” for MSMEs and currently claims more than 6.5 million registered merchant in 750 Indonesian cities, with most in Tier 2 and Tier 3 areas. It says it has processed about $1.4 billion in annualized payments so far, and is on track to process over $10 billion in annualized payments by 2022.
BukuWarung’s new round brings its total funding to $80 million. The company says its growth in users and payment volumes has been capital efficient, and that more than 90% of its funds raised have not been spent. It plans to add more MSME-focused financial services, including lending, savings and insurance, to its platform.
BukuWarung’s new funding announcement comes four months after its previous one, and less than a month after competitor BukuKas disclosed it had raised a $50 million Series B. Both started out as digital bookkeeping apps for MSMEs before expanding into financial services and e-commerce tools.
When asked how BukuWarung plans to continue differentiating from BukuKas, co-founder and CEO Abhinay Peddisetty told TechCrunch, “We don’t see this space as a winner takes all, our focus is on building the best products for MSMEs as proven by our execution on our payments and accounting, shown by massive growth in payments TPV as we’re 10x bigger than the nearest player in this space.”
He added, “We have already run successful lending experiments with partners in fintech and banks and are on track to monetize our merchants backed by our deep payments, accounting and other data that we collect.”
BukuWarung’s new funding will be used to double its current workforce of 150, located in Indonesia, Singapore and India, to 300 and develop BukuWarung’s accounting, digital payments and commerce products, including a payments infrastructure that will include QR payments and other services.
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BukuWarung, a startup digitizing Indonesia’s SMEs, raises new funding from Rocketship.vc
BukuWarung, an Indonesian startup focused on digitizing the country’s 60 million small businesses, announced today it has raised new funding from Rocketship.vc and an Indonesian retail conglomerate.
The amount was undisclosed, but sources say it brings BukuWarung’s total funding so far to $20 million. The company’s last round, announced in September 2020, was between $10 million to $15 million. Launched in 2019, BukuWarung was founded by Chinmay Chauhan and Abhinay Peddisetty and took part in Y Combinator last year.
Rocketship.vc is also an investor in Indian startup Khatabook, which reached a valuation between $275 million to $300 million in its last funding round. Like Khatabook, BukuWarung helps small businesses, like neigborhood stores called warung, that previously relied on paper ledgers transition to digital bookkeeping and online payments. BukuWarung recently launched Tokoko, a Shopify-like tool that lets merchants create online stores through an app, and says Tokoko has been used by 500,000 merchants so far.
Chuahan, BukuWarung’s president, said it has started making revenue through its payments solution. In total, BukuWarung now claims more than 3.5 million registered merchants in 750 Indonesian towns and cities, and says it is recording over $15 billion worth of transactions across its platform and processing over $500 million in terms of volume.
SMEs contribute about 60% to Indonesia’s gross domestic product and employ 97% of its domestic workforce, but many have difficulty accessing financial services that can help them grow. By digitizing their financial records, companies like BukuWarung can make it easier for them to access lines of credit, working capital loans and other services. Other companies serving SMEs in Indonesia, Southeast Asia’s largest economy, include BukuKas and CrediBook.
BukuWarung will use its new funding to grow its tech and product teams in Indonesia, India and Singapore. It plans to launch more monetization products, including credit, and grow its payments solution this year.
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